Can the power of the executive pen save the aviation industry from the challenges it faces?
The 47th president, Donald Trump, signed over three dozen executive orders in his first and second days in office following his inauguration. These policies range from border security to gender ideology, as well as diversity, equity, and inclusion (DEI) initiatives within the federal government. This latter policy directly impacts hiring and training personnel in the aviation industry, particularly in air traffic control, which is governed by the Federal Aviation Administration (FAA).
Apart from some hype surrounding two meme coins—reportedly affiliated with the president and first lady, Melania Trump ($Trump and $Melania, respectively)—there has not been, to the best of our knowledge, any executive orders addressing the economy, particularly on inflation and boosting prosperity within the aviation industry. While there is optimism surrounding the president’s executive actions and what may come, here are some considerations about what truly matters in the real economy, particularly in aviation:
- Diversity, equity, and inclusion (DEI) is a central focus for some, with supporters believing these initiatives have contributed to aviation challenges, while others strongly disagree.
- Concrete fiscal and monetary policies are needed to foster productivity, real investments (not stock market speculation), and inflation reduction to truly aid the aviation industry and beyond.
- When it comes to economic prosperity, the power of the executive pen is limited. Below, we’ll explain why.
Get Involved: Do you believe that the president’s executive orders can benefit the aviation industry economically and promote prosperity? Why or why not? Please share your thoughts in the comments below.
The Focus on Rolling Back DEI Initiatives
One of the most talked-about executive orders is the rollback of all diversity, equity, and inclusion initiatives across the federal government. This directive affects all agencies and departments, including the FAA. While some agencies may resist this move, the executive order is explicit in its demands. Only time will reveal how this resistance plays out.
Here are some considerations:
- DEI’s Role in Aviation Challenges: As we’ve stated in previous articles, there is no conclusive, peer-reviewed research showing that DEI efforts directly lead to increased incidents or accidents in the aviation industry. Without such evidence, it is difficult to predict the impact of rolling back DEI initiatives within FAA activities.
- Hard to Measure: The effects of DEI—positive or negative—are difficult to measure without comprehensive data. As such, any conclusions about its success or failure, or about the consequences of the rollback, would be anecdotal at best. Nonetheless, for some, anecdotal evidence is sufficient to either justify or criticize DEI efforts.
- Private Players Are Independent: The rollback applies primarily to the federal government. Private companies such as airlines, aircraft manufacturers, maintenance operators, and managers are free to set their own policies. However, if recent trends are any indication, private players may also reduce DEI initiatives, citing cost and a lack of direct profit from these activities.
On Aviation™ Note: To be clear, we neither advocate for nor oppose DEI. What we do advocate for is good people doing good work that drives industries, countries, and humanity forward.
Aviation Needs Concrete Fiscal and Monetary Policies
The Trump administration is still in its early days, and we anticipate additional executive orders, congressional acts, and Federal Reserve actions. However, concrete fiscal and monetary policies remain critical to resolving the challenges facing the aviation industry.
- Fiscal Policy: The federal government, Treasury, and Congress should implement bold policies to reduce inflation and boost productivity in the economy. Such measures would provide significant relief to the aviation industry.
- Monetary Policy: While painful, the Federal Reserve must continue its fight against inflation. Inflation appears poised to rise again, and the Federal Reserve must utilize all tools at its disposal to combat it.
On Aviation™ Note: While we are optimistic about the aviation industry’s future, many of its challenges are already “baked into the cake.” There are no current indications of major shifts in monetary or fiscal policy, likely due to political considerations.
Economic Challenges Are Too Complex for the Executive Pen
While the executive pen holds tremendous power, it cannot singlehandedly address the multifaceted economic challenges facing the aviation industry.
- Longstanding Issues: The economic conditions affecting aviation have been building since the early 2000s, particularly following the dot-com bubble and bust during Alan Greenspan’s tenure as Federal Reserve Chairman. Nearly 25 years of fiscal and monetary policies have fostered economic instability, higher inflation, and mounting debt.
- Political Expedience: Addressing these challenges requires political courage. For example, raising interest rates to combat inflation would undoubtedly cause a recession. Given the reliance of businesses, credit markets, and individuals on a low-interest-rate environment, this action would trigger economic pain that most politicians would prefer to avoid during their tenure. Similarly, reigning in government deficits and spending on entitlements like Social Security is politically unpalatable.
- Complexity: The economy—and the aviation industry—are inherently complex systems. Actions aimed at solving one problem often lead to unintended consequences. In such systems, the best approach may involve reducing intervention and allowing the free market to operate naturally.
On Aviation™ Note: While this discussion focuses on the U.S. economy, these principles apply to economies worldwide.
Conclusion
While the executive pen holds significant power, it is insufficient to address the massive challenges faced by the economy and the aviation industry today. In fact, we’ve yet to see concrete executive orders directly targeting these economic issues, likely because such actions would be futile given the complexity of the problems.
The solution lies in freeing the market and reducing government intervention, allowing for spontaneous order and human ingenuity to drive productivity and prosperity. Alas, this approach is unlikely to be adopted, as the political cost would be immense. As a result, we predict inflation will continue to rise, economic conditions will grow more unstable, and leaders will persist with interventions that often exacerbate the issues they aim to solve.
Thank you for reading this week’s On Aviation™ full article. Do you believe that the president’s executive orders can benefit the aviation industry economically and promote prosperity? Why or why not? Please share your thoughts in the comments below. Remember to check out our On Aviation™ Podcast and continue the conversation on our Twitter and Instagram.
Orlando – On Aviation™